For Wholesale Distributors, Supply Chain Partners Are Not Created Equal

Succeeding in wholesale distribution depends on much more than simply knowing costs per unit, quantities on hand and containers in transit. Sustained profitability requires mastering interconnected, many-to-many relationships and developing a deep understanding of the quality, reliability and resiliency of your trading partners and their value to your supply network.

Wholesale distributors have always sought to assess supplier performance. The problem has been that complex IT infrastructures often involving disparate applications, EDI connections, and Excel and paper records provide little visibility into key metrics, leaving wholesale distribution managers to navigate a fast-paced supply environment based on gut instinct and guesswork.

Today’s ultra-competitive, shrinking global marketplace heightens the importance of monitoring and managing supplier performance both in real time and over the long term, and to utilize collaborative technologies to strengthen trading partner interactions. The stakes are high—a disruption triggered by an underperforming partner can result in delays, high emergency costs, customer dissatisfaction and a blow to profitability.

From small regional or niche wholesale distributors to multimillion-dollar global giants, cloud technology is revolutionizing how the industry engages with trading partners, monitors performance and identifies opportunities for improvement. Leading wholesale distributors are breaking new ground with speed, precision, visibility and cost-efficiency that can’t be matched when grappling with disparate, siloed data in spreadsheets and on-premise applications.

From a trading partner optimization perspective, the cloud offers three distinct advantages:

Real-time collaboration. Moving WD processes to the cloud makes it possible for data to flow seamlessly and for wholesale distributors and their trading partners to communicate in lockstep with the same data, audit trails and real-time accuracy at every stage. Stakeholders can share container, pallet, location, forecasting, scheduling and unit-level data while collaborating on a common platform. The cloud's visibility rewards the efficient and effective, and punishes those who fall short of standards or service-level agreement (SLA) specifications.

Single data set. Rather than data on supplier cost, speed, quality and other key metrics scattered across disparate applications or squirreled away in spreadsheets, the cloud enables wholesale distributors to easily build and manage a single data set on trading partner performance. Complete visibility makes it easy to pinpoint margins of difference, assess trends over time, and balance various metrics against each other to make informed, data-driven decisions on overall value.

Business and IT agility. Real-time visibility translates into performance and profitability gains as wholesale distributors can swiftly identify and act on opportunities to ramp up production, switch suppliers, change components or satisfy a special customer order. From an IT perspective, customizing processes or incorporating new functionality (such as with a prebuilt application from a software vendor partnered with your cloud provider) is far faster and less costly than with on-premise solutions, enabling resources to be channeled into building the business, not managing IT.

Trading partner optimization is critical to having the information needed to align business operations with strategic goals, something that is top of mind for many wholesale distributors in 2012. For instance, respondents to a NetSuite survey of mid-market wholesale distributors in North America cited having complete information as key for aligning their business operations. Learn more about the outlook for wholesale distribution and the challenges and strategies for leading organizations in the NetSuite survey report, The Outlook for Wholesale Distribution in 2012.

- Director, Industry Marketing, Wholesale Distribution and Manufacturing

 

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